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In this article Chris Hadrill, a specialist employment solicitor at Redmans, explores what a settlement agreement is and gives some tips on what you should do if you have been offered one

  1. What is a settlement agreement? A quick guide
  2. What should you do if you have been offered a settlement agreement?

What is a settlement agreement? A quick guide

An employee has the right to bring certain claims against their employer, whether such claims can be brought under statute (for example, unfair dismissal or discrimination claims), contract (for example, a failure to pay a bonus), or tort (for example, negligence claims). Such claims may arise on the employee’s recruitment, during the course of their employment, or upon termination. In certain circumstances an employer may wish to agree to provide the employee with benefits (e.g. a payment of compensation, a reference, sometimes an apology) in return for the employee’s agreement that they will waive their right to bring such claims, or withdraw them if they have already issued a claim. This may happen where employment is continuing, but it is most common for the parties to do so where employment has terminated (or is about to do so).

Click here to read more about our guide on settlement agreements

Employees can only agree to settle or waive most statutory claims by one of the following means:

  • If an agreement is reached through ACAS (and recorded in a COT3 agreement); or
  • If such agreement is recorded in a settlement agreement that complies with various statutory requirements (for example, the agreement must be in writing and the employee must receive independent legal advice on the terms and effect of the agreement)

Only certain statutory claims may be settled by a settlement agreement including, among others:

  • Claims for unfair dismissal;
  • Claims for a statutory redundancy payment;
  • Claims for discrimination, harassment, victimisation or detriment;
  • Claims for detriment or dismissal because the employee has ‘blown the whistle’;
  • Claims in relation to the national minimum wage;
  • Claims in relation to unlawful deduction of wages

Until July 2013 statutory agreements of this nature were renamed from “compromise agreements” to “settlement agreements”, although it is not clear why this change was made.

What should you do if you have been offered a settlement agreement?

If you’ve been offered a settlement agreement by your employer then one of the first things that you should normally do is fine a suitable specialist employment solicitor to advise you on your agreement: your employer will normally cover an agreed level of legal fees for the advice and you must receive legal advice from an independent legal adviser on the terms and effect of the agreement for the settlement agreement to be binding. However, it is up to you to choose how much or how little work you want your solicitor to do: most employees will, in my experience, want their solicitor to handle the negotiations on the agreement as well as the advice, but in some circumstances the employee may be best-placed to negotiate the terms of the agreement themselves (for example if they have a good existing relationship with senior management handling the negotiations or if they wish to keep the costs of the negotiation as low as possible).

Why should you choose Redmans to advise you on your settlement agreement?

Redmans have advised thousands of clients on their settlement agreements, and our specialist employment solicitors have dealt with agreements worth £1,000 to settlement agreements worth over £1 million.

If you want to discuss your settlement agreement further please contact our enquiries team by telephone on 020 3397 3601 or email Redmans using the following email address: enquiries@redmans.co.uk.

About Chris Hadrill

Chris is a specialist employment lawyer at Redmans. He specialises in contentious and non-contentious employment matters, including breach of contract claims, compromise agreements and Employment Tribunal cases. He writes on employment law matters on a variety of websites, including Direct 2 Lawyers, Lawontheweb.co.uk, LegalVoice, the Justice Gap and his own blog. Contact Chris by emailing him at chadrill@redmans.co.uk

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    Testimonials

    4.79 Average

    273 Reviews

    Mark M

    I found Redmans very easy to work with. Mel was very responsive, her advice led to an improved settlement. . Recommended.!

    Posted 2 days ago

    Anonymous

    Fantastic service. I would recommend Redmans to anyone who needed a Solicitor. The communication was second to none and consistent clear guidance was given.

    Posted 4 days ago

    Anonymous

    Everyone I dealt with at Redmans were professional, empathetic & always responded promptly and helped make the transition as smooth & efficient as possible for me. If you need legal advice, don’t hesitate & contact the team.

    Posted 6 days ago

    Anonymous

    Sacha was incredibly helpful and professional. Timely and accurate advice at a time I most needed it. I was extremely impressed and grateful.

    Posted 6 days ago

    Sue W

    The people at Redmans talk to you with respect and make you feel like they take your situation personal. They clearly care and are extremely professional. I have recommended Redmans to many people.

    Posted 3 weeks ago

    Anonymous

    Redmans Solicitors were consistently prompt, efficient and professional from the start of my reaching out to them for support in relation to contentious negotiations of an employment matter that continued for almost two months resulting in a positive settlement agreement. Chris Hadrill was diligent, thorough, empathetic and objective in his advice and guidance, showing deep and broad knowledge of the law and legal processes plus extensive practical experience in handling complex matters, resulting in clear and pragmatic advice in ambiguous circumstances that resulted in a very good outcome. I fully recommend Chris Hadrill and Redmans Solicitors! I have made this review anonymous purely because of the confidentiality obligations in the settlement agreement concluded.

    Posted 1 month ago

    Michelle W

    Redmans solicitors provided legal support and advice for a settlement agreement. Excellent customer service, very professional. The senior associate solicitor kept me updated throughout the process, showed empathy and the agreement was signed-off / completed within the agreed timeline.

    Posted 1 month ago

    Mark W

    Redmans Solicitors were extremely professional and helpful! Chris Hadrill handled my case and was an amazing help! His guidance, advice and understanding to my redundancy settlement were always clear, concise and very helpful and I am very grateful to him, and glad I found Redmans to help with my settlement. I highly recommend them!

    Posted 1 month ago

    Alison M

    Very happy with the advice I received

    Posted 2 months ago

    Margaret A

    I found everything about the company to be extremely professional and efficient. During my initial contact with Chris, he listened well and was reassuring, so I felt confident that my case would be well handled. Caroline was excellent at explaining all the legal points and answering my questions, as well as being very supportive and understanding throughout the process. I would definitely recommend this company.

    Posted 2 months ago

    Sanja K

    Very efficient and professional service.

    Posted 2 months ago

    Anonymous

    I found the advice I was given by Redmans Solicitors to be clear and useful and found the solicitor on my case to be both knowledgeable and approachable.

    Posted 2 months ago

    Karen T

    Great service. Thank you.

    Posted 2 months ago

    Anonymous

    Excellent service from Chris & Mel Chin. The best outcome was achieved from the redundancy process. They were extremely thorough, listened carefully and acted swiftly on my behalf. I highly recommend Redmans Solicitors

    Posted 2 months ago

    Shanine M

    Excellent service, thank you so much!

    Posted 2 months ago

    Anonymous

    I found Caroline and Chris very Helpful and provided excellent service. Caroline especially provided great legal advice and made me feel at ease with the whole process. I would highly recommend them. Thank you!

    Posted 2 months ago

    Gayle B

    Excellent company very professional would definitely recommend

    Posted 2 months ago

    Alex K

    Redmans provided an excellent service, timely and effective. Will definitely recommend.

    Posted 2 months ago

    Anonymous

    Great job done on my employment law

    Posted 2 months ago

    Dominica S

    Caroline & Chris were very prompt and efficient.Very happy with the service and will definitely recommend Redmans Solicitor to everyone !

    Posted 2 months ago

    Sandra K

    If you are looking for a group of solicitors who are Professional, Caring and on point, then look no futher than Redmans. I was literally hand held through out my case. Can not find fault with this company, very happy with the result and the service i received. Would highly recommend Redmans.

    Posted 2 months ago